Against the background of the unprecedented crisis within the FTX group, Bitcoin (BTC) and Ether (ETH) are heading towards new lows. Will cryptocurrencies make a comeback or should we expect further drops in the coming days? The point in this analysis.
Bitcoin (BTC) expected to fall towards $14,000?
It is a tidal wave that has been rocking the cryptocurrency ecosystem for the past few days.
Due to this unprecedented crisis within the FTX group, the bitcoin price (BTC) crashed this week below $15,500 and led altcoins to fall to new lows not visited since November 2020.
If the situation seems quite uncertain, especially for customers of the FTX platform who saw their assets frozen very quickly after the first rumors about the platform’s insolvency, cryptocurrencies are threatening to start falling again despite the economic context on the traditional markets which nevertheless appeared to be improving.
The news shows us correlation between cryptocurrencies and stock marketssomething that hasn’t happened in a long time.
So what levels should we be watching in the coming days?
Figure 1 – Bitcoin daily price chart
In our previous analyses, we noted that the price rejected the middle of the range (blue rectangle) that has been building for several months now. This lateralization will finally await the events of the last few days to find a solution, here below.
After breaking out of this range, the initial target seems to be $14,300, which corresponds to the height of the Bear Flag that we have been monitoring for the past several months. The target was implemented a long time ago so the price follows our best case scenario.
When the price reaches $14,300, it will be necessary to observe its reaction to know if we have reached a bottom.
On the weekly chart, we have a Falling Wedge where the price has been moving since the beginning of this Bear Market. We can imagine that a break from the top would trigger a new bullish rally.
Unfortunately, we still have the Cloud, Kijun (purple) and Tenkan (turquoise) that stand in the way of prices and which threatens to return to the low support of the triangle near $14,000.
What is relevant is that this support level corresponds in every way to our daily objective, but also to the Fibonacci extension which gives the target level of $1.618 to $13,965 if we take the last high points.
Figure 2 – Bitcoin weekly price chart
Everything then seems to indicate that Bitcoin is back to around $14,000. To invalidate this case, it will be absolutely necessary to get around $20,000 back on the Kijuna level that would also correspond to the upper part of the wedge falling in yellow and therefore to its breakout.
If we break this pattern above in the coming weeks, then we may have hit the bottom of this Bear Market.
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Ether (ETH) on its way to $762?
After a strong rejection of its Weekly Kijun, the price of Ether (ETH) is starting to fall again this week and is also threatening to break its range from below.
After the partial rotation worked on the center of the range, we now have a high probability of breaking out from the downside with the target at $762 which corresponds to the height of the Ascending Bevel moved to the place of the break.
Figure 3 – Ether price chart (Daily)
To invalidate our bearish target, it will be necessary to leave more than $2,000 (top of the range) to create a new high in this market and therefore break out of the bearish structure. At the moment, we have, therefore, again in favor of bearish settings and objectives.
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The conclusion of this technical analysis
Bitcoin and Ether go down againin search of new lows that will allow the ecosystem to go serenely again towards a new bullish cycle.
In addition to technical analysis, it will obviously be necessary to take into account the macroeconomic context as well as the crypto news related to FTX they are likely to be more decisive for the future.
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Chart sources: TradingView
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